I have been thinking lately about the barriers to broad scale adoption of cryptos in the United States. I am not focused on the issue of getting retailers to accept cryptos, but more on the mind of the consumer/user. While I don't think this is a complete list, here are some factors I thought of that I rarely (if ever) hear discussed:

(1) Inability to think multi-currency -- The US economy is so insulated from foreign exchange that most of our population just doesn't think outside of US dollars. Interaction with Mexico and Canada is limited and often can be done in USD. Foreign transactions are completed automatically by payment processors. We've never had an environment like pre-Euro Europe where traveling a short distance forced you to pay with a different currency. Thus, I think people struggle with the fact that they have to translate everything back to USD. An analogy might be a person learning a new language. At first they translate everything back to their native tongue; it takes time and practice to think directly in the second language.

(2) Not seeing adoption by friends and neighbors - This is just the whole follow-the-crown phenomenon. Crypto needs a critical mass of early adopters to get the ball rolling; we don't have that yet here in the same way that there is in Asia (for example.)

(3) Technical resistance / complexity - We won't get widespread adoption until the user interfaces become more intuituve and transitions into and out of USD are made more seamless (and less expensive).

(4) Lack of financial education - Most of the US population does not understand their own financial system and doesn't see any issue with the USD as money. They don't understand the definition of money and therefore think it has to be issued by a government. They don't understand inflation vs deflation and what it does to their buying power. Etc.

(5) Pervasive lack of concern for privacy -- Privacy seems to not be a concern for most people. Whether through apathy, ignorance, or brainwashing, most of the populations seems to be happy to provide intimate details of their lives on facebook, have all of their email scanned an analyzed when using free services like hotmail and gmail, and have the full breadth of their financial lives exposed to banking and payment processing institutions.

(6) Active disinterest in self-ownership -- Lose your password -> call someone to get it reset. Have a problem with a vendor -> cancel the transaction. Fraud -> get your account made whole. We have a culture of someone else owning the problems. In the current crypto environment, this structure is not in place (at least not in the same way.) The individual is responsible for evaluating different technical solutions and maintaining their own private keys; help may be available, but it is not just a phone call away. Many people just don't have the knowledge, or the inclination to deal with it and a very many people don't want the responsibility. (Of course, there are services that provide some of these functions in the crypto space, but all of them come with trade-offs.)

osubuckeye4

My biggest resistance is lack of FDIC (or any other type of) insurance against unexpected and uncontrollable loss from the user side.

Even if I take every safeguard in the world... if I have my wallet sitting out on one of these exchanges and they get compromised, I lose my entire investment and there is no one to go to recoup my loss.

With a bank, if the bank burns down or goes belly-up, in comes the FDIC to make things right.

Not the case yet with crypto's, and that's why I'm not in on them yet.

I'm not suggesting that the FDIC or any other entity should be responsible if I lose my password.

I'm suggesting that someone should be responsible if Coinbase or any other exchange gets hacked and all of my funds are stolen through no real fault of my own. The fact that doesn't exist (at present) is a huge red flag to me.

I wasn't thinking as broad as complete replacement of checking accounts etc, but I could see that as an end state. Even then , I think the idea with cryptos is that we can transact directly without the need for a Coinbase or similar. Coinbase is great (for now) as an onramp from FIAT to crypto, but once you have your currency, they don't need to be in the picture any more. ie. If I want to pay you for a product/service, I can send money directly from my wallet to your wallet and there is no third party. That's the beauty of it....that we don't need something like Coinbase to be the bank.

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osubuckeye4

I wasn't thinking as broad as complete replacement of checking accounts etc, but I could see that as an end state. Even then , I think the idea with cryptos is that we can transact directly without the need for a Coinbase or similar. Coinbase is great (for now) as an onramp from FIAT to crypto, but once you have your currency, they don't need to be in the picture any more. ie. If I want to pay you for a product/service, I can send money directly from my wallet to your wallet and there is no third party. That's the beauty of it....that we don't need something like Coinbase to be the bank.

I agree that it would be great if we removed the middlemen completely.

I think that there are some security mechanisms that need to be implemented to get us there.

Andreas Antonopoulos tells audiences that using cryptocurrencies today is as difficult as it was to send email in 1990, only the super committed tech types dared jump through all the hoops necessary to send text to someone halfway around the world. There’s an underlying protocol that is viable, but it’s not ready for your mom to start using for transactions, and won’t be for at least a decade. The biggest missing piece is easy to use identity verification that is highly resistant to attack. That’s the major missing piece for secure management of all our digital assets.

Well, I guess I can summarize my own personal consumer-side rejection. This overlaps with ID_Joker's list.

I don't understand how cryptocurrencies work. I'm a fairly nerdy guy, and I'm probably capable of understanding "well enough" -- but maybe it's my nerdiness that's holding me back. I don't need to personally audit the computer code, but I do feel like I need a pretty deep understanding before I can trust the system, and especially before I can trust a particular cryptocurrency. That would take a lot of effort.

My mom woudn't use cryptocurrencies. What I mean is, a large number of average folks are smart/knowledgable enough to be afraid of what they don't know about cryptocurrencies. I expect most cryptocurrency users will be either VERY knowledgable about the topic, or very UN-knowledgable and lacking the ability to recognize their own ignorance. That leaves a big group in the middle who won't adopt crypto unless there's no practical way to avoid it (i.e. if it becomes as unavoidable as Paypal).

The price is too volatile for me to think of it as a cash substitute. I'd have to treat it as an investment.

To expand on #6 (I think this is the biggest problem):Research is hard, most people are lazy, and if YOU make a stupid mistake YOU eat the loss.You don't get to call 1-800-I'MA-BABY and act like a brat until mommy fixes it for you like you can in every other industry.

That really is the deal-breaker for most people I think. That and it's so new that everything changes so fast that you basically have to be involved and actively monitoring everything constantly - There is no set it and forget it.

But in defense of the ones that can't stay on top of it constantly, the amount of absolute nonsense posted EVERYWHERE every day regarding cryptocurrency is absolutely mind-boggling... It's not like the good old days when the internet was young and the idiots weren't on it yet, and you could just search for the answer to whatever your question was and find it and get on with your day. That's why I don't blame anyone for being afraid of it still... it's a lot of work, but it can pay off...

To expand on #6 (I think this is the biggest problem):Research is hard, most people are lazy, and if YOU make a stupid mistake YOU eat the loss.You don't get to call 1-800-I'MA-BABY and act like a brat until mommy fixes it for you like you can in every other industry.

That really is the deal-breaker for most people I think. That and it's so new that everything changes so fast that you basically have to be involved and actively monitoring everything constantly - There is no set it and forget it.

But in defense of the ones that can't stay on top of it constantly, the amount of absolute nonsense posted EVERYWHERE every day regarding cryptocurrency is absolutely mind-boggling... It's not like the good old days when the internet was young and the idiots weren't on it yet, and you could just search for the answer to whatever your question was and find it and get on with your day. That's why I don't blame anyone for being afraid of it still... it's a lot of work, but it can pay off...

Reference "research is hard, people are lazy...personal responsibility scares people."

Disagree slightly with the attribution. I don'tcare about crypto currencies just like I don't care about many tech related things. I am not claiming they are not important to modern society or that I don't think they have a place in a more free society. But I have limited mental bandwidth and don't care to use mine for this. I don't care what advantages it could have for me, I can't do everything and for better or for worse I have chosen not to even put it on the list.

Similarly, I have marginal computer skills. I can power point and excel, but I am scraping the bottom end of acceptable computer skills to be a forum moderator.

Ya'll are doing God's work I am sure. I just don't care to. I also didn't do email in 1990, I waited for hotmail. Give me a call when crypto has its hotmail moment. In the meantime I will strive mightily to know more than anyone I meet about a number of other topics.

The lack of competence. The "experts" all tell you sign up for a Coinbase account. Yet Coinbase is so mismanaged that it took months to access the latest fork to BCH. The smart players have always preferred Blockchain.info or other options that allow you to keep your private keys (I did a paper wallet) but have been castigated because it's harder to buy in.

What actually scares me about crypto is the value proposition. When I got into Bitcoin it was going to be a seamless global value transfer. Western union, Visa, Mastercard, and the banks were going to die at the feet of Bitcoin. But all that value is gone now. Bitcoin is now gold, with all the same industrial and fashion uses.

I'm also wary of the people on CNBC who tell me I should have 5% of wealth in Bitcoin (they never discuss alt-coins). Should I be 7% in Swiss Franks? 3% in Euros?

Investment aside, most of the crypto currencies are terrible logistically and have big liquidity problems.

I have very modest amounts in various alt-coin wallets. In many cases the mining fees of particular coins exceeded the value I wanted to transfer. Further I have had many times that CoinBase, Jaxx and other (brokers?) were unable to shapeshift/exchange between currencies for various reasons.

During market trading hours, I can reasonably expect transactions to execute immediately. So while BTC might appreciate 300%, I'd still rather own CAT that grows only 30%, but with the added benefit of being converted into USD in my checking account within a few business days at most.

That all said, if any cryptos will flourish, it's going to be whichever has Point of Sale networks are easy to use and ubiquitous. There was a time about 20 years ago when a lot of people were uncomfortable paying for gas at the pump, but today 99% of consumer gasoline is likely bought at the pump with no human interaction.

Disagree slightly with the attribution. I don'tcare about crypto currencies just like I don't care about many tech related things. I am not claiming they are not important to modern society or that I don't think they have a place in a more free society. But I have limited mental bandwidth and don't care to use mine for this. I don't care what advantages it could have for me, I can't do everything and for better or for worse I have chosen not to even put it on the list.

Good point there. Though really I was aiming that statement more at the guy that says "I'm interested in this bitcoin thing I guess I'll go buy some..." (a few hours later after no research and a stupid mistake) "Wait what do you mean my money is GONE! Scammers!!"

I really wasn't including people like you that just aren't interested or don't have the time -- that was me as well for quite a while, I had gotten completely out when bitcoin was at the incredible all time high of like $5..

Here's another point to add to the list from the OP -- Those of us that LIKE IT THE WAY IT IS!

I mean we have this wonderful little world of practically endless free money that any moron like me with no stock market experience can grab a slice of if they just do a little research and risk a little money on it.

For the long term I'm counting on things like IOTA (which is like bitcoin 2.0 - the first real technology advancement -- no fees, no mining, no centralization (because of no mining -- blockchains centralize around the miners) because people are eventually going to realize how crappy blockchains really are) but for now I actually like things the way they are.

More mainstream acceptance just means more evil government involvement which just means more of your money stolen... I kind of enjoy the wild west and I think A LOT of people already involved would agree.

IOTA made use of a self-designed hash function named Curl. In July 2017 researchers found a critical vulnerability allowing them to forge signatures. Generally, the researchers criticize the use of self-developed cryptography. On 7 August the developers replaced the hash function with a version of SHA-3 named Kerl, which works with ternary (instead of binary) operations, effectively fixing the vulnerability.

I'm concerned that cryptocurrency developers are typical software developers. As software users, we all know that most software development works on the principle of "fix it until it's good enough to release, then fix the other bugs and vulnerabilities when they get discovered".

Cryptocurrency CAN NOT operate this way, and get accepted by anyone other than risk-takers. I know that it's possible to "prove" computer code in the same way that you "prove" a mathematical statement. This, at minimum, is what's needed for crypto.

I think that as more platforms allow for the techologically ignorant to do something which earns them cryptocurrency, this will begin to wane.

For example, I started a blog on Steemit.com. It's a social network, basically, but instead of getting a thumbs up, people vote with their cryptocurrency. My little sister can start a blog and, whether you think all cryptos will fail or not, she can actually cash out some of that digital funny money and turn it into something she understands- Dollars.

A new platform was launched this past Friday called Latium, currently only in its ALPHA stage. It's a bold attempt to take the entire gig economy (think fiverr.com, Uber, AirBNB, etc) and make it easy for random schmoes to accept tasks and get paid in crypto. I wrote about it at length here if you're interested.

I think it' could be an interesting labor market disruption as kids are fiddling around online looking for employment opportunities.

TLDR: I think your #2 point is extremely valid but as the headlines keep pounding the cryptocurrency drum, we'll seen a wider adoption into the crypto world.

Thanks everyone for your perspectives! I agree with a lot of concerns, and I don't think cryptos are in any way ready for real primetime. But I do think they are on the path to that 'hotmail moment'. The usability issues will get sorted out; pricing will become more stable; there will be more point of sale availability......all in time!

I don't begrudge anyone who doesn't want to play in this space right now. I haven't suggested it to my mother as an investment strategy. I have neighbors and friends ask about it and I tell them as far as I'm concerned it's "Vegas money only" right now. But I also add that I think from an educational perspective it is worth 20 bucks and a couple hours to see how it works.

Hope you all have a good celebration tonight. Be safe, have a great 2018, and be sure to sell your BTC when it hit's $1.2mm.

Thanks for the heads-up on Iota. But again, I see they screwed things up from the start:

They've definitely had their share of initial issues (that particular one you linked is really old news considering how new iota really is...), IOTA is very much ALPHA right now not even BETA... Not to turn this into an IOTA commercial, but they've addressed the "bug problem" pretty well with the "coordinator", (which is a bit of a centralized safety measure, that will be eliminated once the network is more mature). It has so far protected everyone from any software/network issues, and while they do have absolutely pathetic public relations at the moment, when something goes wrong they are on top of it right away. They do care a lot more about building business relationships for actual machine to machine economy use than catering to all the speculators right now.

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Cryptocurrency CAN NOT operate this way, and get accepted by anyone other than risk-takers. I know that it's possible to "prove" computer code in the same way that you "prove" a mathematical statement. This, at minimum, is what's needed for crypto.

Completely agree. That is a major problem in the entire crypto space. The "coordinator" approach IOTA has taken is the first real attempt to buffer against that problem that I'm aware of, hopefully others will come up with better solutions. There is also the public "test-net" where things get ironed out, but that's probably not unique to iota.

On a side note, the IOTA network was recently under HEAVY attack (no doubt by unhappy competitors) for weeks and they actually had the fix for it within hours apparently, but let it run for a while to collect real world data on how the network would respond to attack. I like that, to me that says they care more about making it robust than catering to the whiners (which again they've made abundantly clear -- terrible PR). The neat thing about the way the network works is that the sort of attacks bitcoin or any of the hundred clones would crumble beneath, actually make the tangle work faster. Previous "attacks" had the tangle moving at light speed for quite a while before the morons realized they were helping IOTA and stopped! It was hilarious.

But anyway sorry not trying to hijack and turn this into an IOTA promotion, I just thought that it was relevant to answer your concerns, since they are valid ones.

Let me add one more little point to the original discussion: The almost cult-like belief that Bitcoin itself (and none other) must be the "main one", that it is the only one that can be "mainstream" that it will be around forever, etc etc is a huge hindrance to any sort of widespread crypto adoption. Even Litecoin, which is nothing but a bitcoin clone with a few numbers changed, has massively out performed bitcoin in every measurable way (except market price) for a long time now and continues to do so.

Bitcoin SUCKS anyone who has tried to actually use it instead of just buying and holding in coinbase knows this, unless they've lied to themselves to justify the bad buy they made at $19,500. It's slow, it's pretty well centralized in china (huge mining farms), the fees are just plain disgusting ($20 to send $100 REALLY??) (yes I understand why the fees are there and why they are that high, and those very reasons are my argument against bitcoin, and most of the ripoff blockchain type clones.) and once it's no longer profitable for miners to mine it, it's dead! That's it! These guys aren't mining because they care about the future of bitcoin, they have high powered money-crapping machines, and when they stop crapping money they're going to shut them off (or switch to another chain like bcash or whatever happens to be profitable at the time).